Bloomberg News

Lira Rises First Day in Five on Bets of ECB Steps Against Crisis

December 07, 2011

Dec. 7 (Bloomberg) -- The Turkish lira strengthened for the first day in five on bets that the European Central Bank will expand funding to the region’s most indebted nations.

The lira appreciated 0.3 percent to 1.8293 per dollar at 9:08 a.m. in Istanbul. The currency lost 15.6 percent this year, making it the second-worst performer among more than 20 emerging market currencies tracked by Bloomberg.

German Chancellor Angela Merkel and French President Nicolas Sarkozy are pushing for new rules to tighten euro-area economic cooperation before a Dec. 8-9 summit of European Union leaders. Europe may combine temporary and planned permanent rescue facilities to bolster its bailout resources, the Financial Times reported yesterday.

“A lot of people are banking on the ECB announcing some sort of commitment to intervene more aggressively in periphery bond markets, if EU policymakers show significant efforts to move towards a fiscal union,” said Thu Lan Nguyen, a currency strategist at Commerzbank AG in Frankfurt, said in e-mailed comments.

--Editors: Ash Kumar, Peter Branton

To contact the reporter on this story: Selcuk Gokoluk in Istanbul at sgokoluk@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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